Defaults, Missed payments & arrangements

MillsC

Hi all,

I see a lot of people reference defaults as the cause of poor credit ratings. Is a defaut just any instance of missing a payment / arrangement or something different?

Thanks and sorry if this is an abvious question.

Thrugelmir

Perhaps this will make matters clearer.

The term ‘default’, when recorded on a credit reference file should be used to refer to a situation when “the lender in a standard business relationship with the individual decides the relationship has broken down”.

Indicators of a default

The following indicate that a breakdown has occurred in most types of instances. This list is not necessarily exhaustive.

ƒ The account has been referred to a collection agency or in-house
debt collection department.

ƒ The account has been referred for legal action.

ƒ The account has been included in a bankruptcy, IVA, or similar.

ƒ The asset financed has been repossessed or instructions for
repossession have been given.

ƒ The lender takes or has taken steps to cut off the service provided (or would do so if they were not prevented on social rather than commercial grounds or by other regulations, codes of practice or statute).

ƒ The customer has not made satisfactory proposals in response to a demand for repayment.

The customer has given a clear indication, for example, by handing back an asset, that they do not intend to meet their contractual obligations.

ƒ The lender has evidence that an account has been opened or used
for fraudulent purposes by the applicant.